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Thompson Hine LLP, a full-service business law firm with approximately 400 lawyers in 8 offices, was ranked number 1 in the category “Most innovative North American law firms: New working models” by The Financial Times and was 1 of 7 firms shortlisted for The American Lawyer’s inaugural Legal Services Innovation Award. The firm has been recognized by the National Law Journal as a Legal Technology Trailblazer and featured by Bloomberg for its innovative service delivery models, which drive accuracy and predictability. The firm’s commitment to innovation is embodied in Thompson Hine SmartPaTHTM – a smarter way to work – predictable, efficient and aligned with client goals. For more information, please visit ThompsonHine.com and ThompsonHine.com/SmartPaTH.

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On June 21, 2019, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) amended the Reporting, Procedures and Penalties Regulations, 31 C.F.R. Part 501 (RPPR), to require all U.S. persons and persons otherwise subject to U.S. jurisdiction, not only U.S. financial institutions as previously required, to file certain reports on blocked property and rejected transactions pursuant to RPPR §§ 501.603 and 604.

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Any such person holding property that became blocked between July 1, 2020 and June 30, 2021 must file an annual report with OFAC in compliance with 31 C.F.R. § 501.603(b)(2)(i)–(iii) by September 30, 2021.

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All property and interests in property of any person designated by OFAC to the Specially Designated Nationals and Blocked Entities List (SDN) or any person owned 50% or greater by an SDN entity that is in the United States, comes within the United States or comes within the possession and control of U.S. persons is blocked. Property of persons subject to certain other sanctions may also be blocked under the terms of the sanctions. U.S. persons are prohibited from directly or indirectly dealing in or with blocked property. Blocked property and interests in property is defined broadly to include not only tangible and intangible property but also accounts payable, invoices, contracts and other intangible items in which a blocked person holds an interest.

Blocked property becomes unblocked only if OFAC issues a specific or general license authorizing its unblocking.

A rejected transaction is one that does not involve blocked property or interests in property but where processing or engaging in the transaction would nonetheless result in a violation of any OFAC sanctions regulation. For example, many potential transactions with a non-SDN Iranian entity would be treated as rejected rather than blocked.

What Are the Initial Reporting Requirements?

All U.S. persons and persons otherwise subject to U.S. jurisdiction are required to submit an initial report to OFAC within 10 business days of blocking or rejecting a transaction pursuant to RPPR §§ 501.603 and 604. The initial blocked property and rejected transaction reports must include:

What Are the Annual Reporting Requirements?

An annual report on all blocked property held as of June 30 of the current year must be filed by September 30 of that year. The annual reporting requirement does not include rejected transactions, which are subject only to initial reporting requirements.

The annual report of blocked property must include the same information submitted with the initial blocked property report and listed above as items 1 through 6, except for copies of documents noted in item 7.

Initial reports and annual reports may be filed using the OFAC Reporting System (ORS), a publicly accessible electronic reporting platform for submitting reports on blocked property and rejected transactions. To register for access, a filer should email <a href="mailto:OFACReport@treasury.gov">OFACReport@treasury.gov</a> and include the name of the reporting institution and the names and emails of the primary point of contact and any other person authorized to file reports. If the ORS is unavailable, filers must send completed forms (available <a href="https://home.treasury.gov/policy-issues/financial-sanctions/ofac-reporting-system" target="_blank" rel="noopener">here</a>) to <a href="mailto:OFACReport@treasury.gov">OFACReport@treasury.gov</a>.

Francesca M.S. Guerrero Partner, International Trade 202.973.2774 <a href="mailto:Francesca.Guerrero@ThompsonHine.com">Francesca.Guerrero@ThompsonHine.com</a>

Samir D. Varma Partner, International Trade 202.263.4136 <a href="mailto:Samir.Varma@ThompsonHine.com">Samir.Varma@ThompsonHine.com</a>

Joyce Rodriguez Associate, International Trade 202.973.2724 <a href="mailto:Joyce.Rodriguez@ThompsonHine.com">Joyce.Rodriguez@ThompsonHine.com</a>

Scott E. Diamond* Senior Legislative &amp; Regulatory Policy Advisor, International Trade 202.263.4197 <a href="mailto:Scott.Diamond@ThompsonHine.com">Scott.Diamond@ThompsonHine.com</a>

This advisory bulletin may be reproduced, in whole or in part, with the prior permission of Thompson Hine LLP and acknowledgment of its source and copyright. This publication is intended to inform clients about legal matters of current interest. It is not intended as legal advice. Readers should not act upon the information contained in it without professional counsel.

This document may be considered attorney advertising in some jurisdictions.

https://admin.thompsonhine.com/wp-content/uploads/2022/04/International_Trade_Update_-_Annual_Blocked_Property_Reports_Due_to_OFAC_on_September_30.pdf

Annual Blocked Property Reports Due to OFAC on September 30

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